CRA agents had alleged a 'fraudulent scheme' by Mohamed Jesow of bogus deductions and donations

Cattle-farming accountant Mohamed Jesow has been cleared by the CRA of criminal allegations that he doctored clients' tax returns with fake or inflated donations, expenses and business losses. Earlier this year, he said: 'Revenue Canada officers make this up. They're trying to get me.' (Facebook)Jesow built this resort hotel complex on the outskirts of Mogadishu. He now lives on the adjoining estate. (Flickr)

An accountant who the Canada Revenue Agency had claimed was
possibly behind widescale tax fraud won't face criminal charges due to
lack of proof of intent.

Investigators had alleged
that Mohamed Ali Jesow, who prepared and filed tax returns for hundreds
of people out of a basement office in west end Toronto, systematically
fabricated or inflated various deductions and business losses on his
clients' T1 forms.

Jesow's office was raided last year after agents obtained a search warrant.

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But
earlier this week, Jesow posted on his Facebook account a letter from
the CRA, dated July 31, informing him that "charges will not be laid in
this case."

The CRA confirmed in a statement to CBC that its nearly three-year investigation has ended with no criminal charges.

"There
needs to be sufficient evidence to establish that a crime has been
committed and that the individual did so with intent," the statement
says. "The CRA can confirm that no charges have been laid against Mr.
Jesow due to the lack of evidence."

Jesow was jubilant at the news.

"I am very happy with the CRA decision. And I truly believe that, in this case, justice was served," he said in an email Friday.

Jesow built this resort hotel complex on the outskirts of Mogadishu. He now lives on the adjoining estate. (Flickr)

Uncanny similarities

The
origins of the CRA probe into Jesow date back four years, when an
auditor noticed an uncanny number of Toronto-area residents' tax returns
being filed with similar amounts claimed for "carrying charges and
interest expenses." Those are deductions that can be claimed for costs
related to earning investment income.

Subsequent investigation
determined that of 1,473 people who seemed to have hired Jesow to file
their taxes, 85 claimed the exact same amount, $903, in carrying charges
and interest in 2012; another 74 were all claiming a slightly higher
amount, $1,025.

Criminal investigators decided to take a closer
look and, after interviewing two dozen of Jesow's clients, found that 22
of them said they had not actually incurred any carrying charges or
interest expenses, according to a court filing.

The investigators
also found what they alleged were bogus claims for charitable donations,
business losses and medical expenses, and in a sworn statement, said it
amounted to a "fraudulent scheme" that could potentially have involved
millions of dollars in phoney tax deductions.

The allegations were never tested in court, however.

The
tax preparation business was run out of a basement office in west-end
Toronto since 2014. The premises were raided by the CRA in March 2017.
(Google Streetview)

'This is all coming from pressure on the clients'

Jesow
told CBC in an interview earlier this year that all the taxpayers the
CRA interviewed had lied — that they supplied him the numbers that he
dutifully filled in on their tax returns, but then they threw him under
the bus due to "intimidation" from the agency's investigators.

"I never did anything that these clients didn't know, and this
is all coming from pressure on the clients. The way Revenue Canada
officers work, they go as far as saying, 'If you admit that Mr. Jesow
did this for you, then we will not charge you with criminal charges,' "
he said at the time.

On Friday, Jesow reaffirmed that he never fabricated figures on his clients' tax forms.

Jesow
moved to Canada in 1989 and ran a tax-preparation business for two
decades in Toronto. He returned for good to Somalia in recent years
where he raises livestock, grows crops and makes cheese. (Facebook)

"I
always advised my clients to keep their records as required by the CRA
rules and regulations. Some clients don't even have any record and thus,
come tax time, [gave] estimations of their business activities.

"It
is not easy when tax filers don't have any record. But I never did use
estimations of my own or fake charitable donations, or presented forged
receipts to the CRA."

On Facebook, his supporters cheered the news that he won't face charges.

"I
know what you must have gone through when people from your own
community judge you as a criminal. I never doubted you," one person
wrote.

"Good news! Congratulations, bro," another said.

Even
if the CRA had decided to lay charges against Jesow, it would have been
difficult to prosecute him. After operating his tax preparation
business in Toronto for two decades, he moved back in recent years to
his native Somalia, which has no extradition treaty with Canada.